Prof Chuck Holmes, The Common Sense Economist

WHAT ECONOMIC RECOVERY?

The administration keeps talking about the “phony scandals” diverting the attention of Americans from the real problems of jobs and the economy. Mortimer Zuckerman, in a July 16 Wall Street Journal op-ed, “A Jobless Recovery is a Phony Recovery,” said a few other things out of Washington are phony.
Zuckerman reports that while the government says that 753,000 more people have jobs since the first of the year 557,000 of these jobs are part-time. Full-time jobs declined by 240,000 in June while pat-time jobs increased 360,000. Part-time jobs are now at an all-time high of 28,059,000, three million more than in 2007. He says that the 7.6% unemployment rate stated by the government is phony. There is an estimated 22 million Americans who are unemployed or under employed, and that the real unemployment rate for June is 14.3%, up from 13.8% in May. Mr. Zuckerman also mentions the labor participation rate, or the proportion of the labor force who have jobs or are actively seeking work, stands at only 63.5%, a “drop of 2.2 percent since the recession ended.”
His analysis is consistent with my CSE Newsletter of May 12, “The Unemployment Rate is 7.5 Percent, or is it?” when I stated the following:

“The U6 unemployment rate was 13.9% in April, up from 13.8% in March. Part-time workers are considered fully employed in U6, which makes the 7.5% rate smell a little fishy.
Major increases in employment during April included increases in the services sector—food services and drinking place, retail trade, and health care. Other than health care, these are not exactly career positions. Food services and bar tending are often temporary jobs that people seek as an interim while looking for real work.”

Family income is another indicator of a phony recovery. At the start of the “Great Recession” in 2009, median family income was $53,000. In 2011 when the recession “ended,” median income was $49,900. Economic growth during the Reagan recovery after the Carter recession was a booming 6.8% with over one million jobs created in one month. Growth in the Obama recovery was a paltry 1.7% in the first quarter of this year and Obama brags about creating 227,000 jobs.
Where is the economic recovery? At the rate we are going, it will take us a hundred years to get back to where we were, much less grow so that we can pay off the current $17 trillion moving to $25 trillion national debt. And $25 trillion is my conservative estimate.
While our government leaders want us to believe that real scandals plaguing Washington are phony, they want us to believe that the phony recovery is REAL! Go figure.